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Cartel Leniency and Settlements: A Joint Perspective

Author

Listed:
  • Peter T. Dijkstra

    (Netherlands Authority for Consumers & Markets)

  • Jacob Seifert

    (University of Leicester, School of Business)

Abstract

This paper studies the interactions between a cartel leniency program and a settlement procedure. The EU settlement procedure gives colluding firms that do not apply for leniency an additional opportunity to cooperate with the competition authority in exchange for a reduced fine after a preliminary case has been established against them. We derive the conditions under which colluding firms apply for leniency, settle, or refuse to cooperate with the authority in equilibrium. Our policy results show that settlements can act as a complement or as a substitute to the leniency program. We also study the welfare-optimal policy and highlight a novel interdependence between the fine reductions that should be offered to leniency applicants and to settling firms.

Suggested Citation

  • Peter T. Dijkstra & Jacob Seifert, 2023. "Cartel Leniency and Settlements: A Joint Perspective," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 63(2), pages 239-273, September.
    • Handle: RePEc:kap:revind:v:63:y:2023:i:2:d:10.1007_s11151-023-09910-4
    DOI: 10.1007/s11151-023-09910-4
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    More about this item

    Keywords

    Cartels; Leniency; Settlements; Welfare;
    All these keywords.

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

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